The rise of the millennial and what it means for retail
Making up a fourth of the population and responsible for over $600 billion in annual marketplace spending, it is little wonder that retailers are racing to win the trust — and cash — of the millennial shopper.
Born between 1980 and 2000, the millennial is perhaps the most talked about generation in retail. They are also the poorest. Millennials love to shop, but are seldom likely to make a purchase and are rarely loyal to just one brand.
But as this demographic becomes more prominent, they become more important to retailers. Brands need to identify not only how they can capture this audience, but what the rise of the millennial will mean for the retail industry as a whole.
Myth-busting the millennial market
When brands think of this growing group of 18–33 year old consumers, a number of myths inevitably spring to mind. But as with targeting any consumer demographic, retailers need to look beyond the stereotypes and perceived norms.
So what are the common myths about millennial shoppers?
- They expect digital focused experiences
- They have little money, so are less likely to spend
- They're only concerned with e-commerce
- They're promiscuous shoppers, and rarely loyal to a particular brand
The millennial is becoming one of the most important demographics for retailers; with increasing purchasing power, brands are desperate to take control of this audience and turn them into lifelong consumers.
Are these myths true? How can brands appeal to these seemingly fickle shoppers? And what does the rise of the millennial mean for the retail industry?
1. Targeting digital natives
The term 'digital native' may be something of a buzzword at the moment, but it does perfectly describe this market. As the first generation brought up in an Internet age, millennials can easily master digital platforms without the need for any adaptation.
The World Wide Web, smart phones and social media are so innate within their lifestyle, this audience are always connected and always looking for the "next big thing" when it comes to technology and digital integration.
Seamlessly integrated, interactive and inspirational experiences are expected by many shoppers — including this audience. That means that brands need to look beyond the traditional retail store, and look at ways they can appeal to this audience.
The use of iBeacons within retail for example, is a great way that brands can capture digital natives and millennials as they browse store shelves. Apps, in-store digital connectivity and seamless digital integration are just some of the ways brands and retailers should be reaching out to this rising demographic.
2. Facing economic hardship
The millennial audience may be the best-educated generation of young adults, but they are also one of the poorest. Not only have they grown up in one of the worst recessions in living memory, but they are also struggling to pay back crippling amounts of student debt.
This has created a generation of savvy shoppers, less likely to flit away their hard-earned cash on impulsive purchases. But that doesn't mean they're not willing to buy at all; it just means they have developed different shopping habits.
With unlimited access to price comparisons online, millennials are constantly searching for the best bang for their buck. They crave the best products, and the best prices, and are willing to look further afield for brands that meet these needs.
Brands and retailers then, need to be looking at new ways they can deliver the best deals to customers — as and when they're looking for them. Again, iBeacons provide a huge opportunity here; brands need to be thinking about how they can deliver value for money.
3. Online vs. offline shopping
A trend (and myth) around millennials: desire for the best deal has led to a growth in online shopping. Many marketers and retailers believe that this audience prefer to shop online in order to get the best deals.
In reality though, the majority of millennials prefer shopping in bricks-and-mortar stores. This is partly down to the fact it provides instant gratification, but also because it provides a real, tangible opportunity for shoppers to test the quality of items for themselves.
While online is important, this demographic is concerned with a much more multichannel approach. What this means for retail is that brands need to deliver seamless, cross-channel shopping experiences that meet the unique needs of their customers.
This audience will happily flit between browsing products on their smart phone, to checking them out in store, before buying online. It is the job of modern retailers to ensure a consistent experience across all these channels.
4. Appealing to promiscuous shoppers
According to Pew's Social Trends, millennials are less loyal — to political parties, to religious organizations, and to brands and retailers — than previous generations. Their constant deal hunting and promiscuous approach to shopping has meant that brands need to work a lot harder to retain them.
Content and design driven brands that meet the needs of this audience can gain their trust and help to forge long lasting client relationships. Retailers need a constant presence in order to really make the most of this audience, using social channels to gain their trust and push out tailored content.
For example, Kate Spade's Behind the Curtain columns do more than promote the latest products. They include city guides, how to's, and other content that appeals to their target audience without being overtly "sales." This keeps customers coming back for more, and eventually parting with their cash.
What does all this mean for retail?
As companies fight to win the custom of the millennial shopper, the retail industry needs to adapt to meet the needs of this new breed of consumer. Modern retail is going through a huge change and brands need to be at the top of their game in order to reach out and make the most of this state of flux.
The rise of the millennial means that retailers need to move the goalposts of traditional retailing and look to the ways in which they can really make a brand splash and reach out to a new, constantly "switched on" audience.
(Photo by Helen Keegan.)
Clare Evans Clare Evans is the Marketing Executive for Green Room; one of the UKs leading retail design agencies specialising in store design, retail strategy and experiential design. www